Sabre Travel International, Ltd. v. Deutsche Lufthansa Ag, Austrian Airlines Ag, Brussels Airlines, nv/sa, and Swiss International Air Lines, Ltd.
Sabre Travel International, Ltd. v. Deutsche Lufthansa Ag, Austrian Airlines Ag, Brussels Airlines, nv/sa, and Swiss International Air Lines, Ltd.
Opinion
In this case, we consider whether an appellate court's denial of a permissive interlocutory appeal prevents this Court from reviewing the merits of the underlying interlocutory order. We hold that it does not under the plain language of former Texas Government Code section 22.225(d). In addition, we consider whether the federal Airline Deregulation Act (ADA) preempts an airline's claim for tortious *728 interference with contract brought under state law. We hold that no preemption occurs because the tortious interference claim does not relate to the airline's prices, routes, or services. Nor does the claim amount to the enforcement of a state law, rule, regulation, standard, or other provision having the force and effect of law that is within the ADA's preemptive reach. Accordingly, we affirm the trial court's denial of the motion to dismiss based on preemption.
I. Background
Direct connections in the airline industry refer to methods used to market airfare directly to travel agents. Once travel agents gain access to an airline's reservation system through a direct-connect method, they can review the airline's inventory, check flight availability, price flight options, and book flights for passengers. Airlines also use indirect methods, such as intermediaries, to market and sell airfare. Sabre Travel International, Ltd., has long served as an intermediary in the travel industry. Through a computerized system known as a Global Distribution System (GDS), Sabre connects airlines with consumers by aggregating travel offerings of multiple airlines for comparison shopping by travel agents. Sabre's GDS is one of the largest on the market, aggregating content for over 400 airlines.
Deutsche Lufthansa Airline Group owns multiple subsidiary airlines. Four of those airlines (collectively, Lufthansa) contracted with Sabre to market and sell tickets through Sabre's GDS. Under the contracts, Sabre received a booking fee when travel agents booked flights on Lufthansa. The contracts also contained non-discrimination provisions, preventing Lufthansa from disadvantaging travel agents who use Sabre's GDS instead of a competing GDS.
Concerned with the expense of GDS services, Lufthansa calculated that it cost the airlines approximately $ 18 more for every ticket booked through a GDS. To allocate this cost, increase transparency, and offset the high fees of GDS services, Lufthansa introduced an $ 18 surcharge to airline tickets sold through GDSs. The surcharge does not apply to tickets booked through non-GDS channels, such as direct connections and Lufthansa's own websites.
Sabre protested that the surcharge violated the contracts' non-discrimination provisions because Lufthansa did not impose the same surcharge equally across all GDSs. Lufthansa maintains otherwise, arguing that its surcharge complies with the parties' contracts. This dispute became the subject of Lufthansa's declaratory judgment suit against Sabre, and Sabre's corresponding counterclaim for breach of contract.
Sabre, in response to the surcharge, allegedly began encouraging travel agents to breach their contracts with Lufthansa by directing them to book travel through Lufthansa's direct connections, where there is no surcharge, and then enter the itineraries into Sabre's GDS so that travel agents could avoid the surcharge and Sabre could collect its booking fee. Because of Sabre's alleged actions, Lufthansa amended its petition to include a claim for tortious interference with contract between Lufthansa and its travel agents. Lufthansa also added a breach of contract action against Sabre for charging Lufthansa for non-billable administrative bookings-in other words, passive bookings.
Sabre promptly filed a motion to dismiss Lufthansa's tortious interference claim under Texas Rule of Civil Procedure 91a, arguing that the federal ADA preempts claims for tortious interference with contract.
See
The court of appeals denied the permissive appeal in a single-sentence memorandum opinion without explanation but noted in a footnote that "courts strictly construe the interlocutory appeals statute."
Sabre filed a petition for review in this Court, asserting that the court of appeals abused its discretion in denying the permissive interlocutory appeal and that the ADA preempts Lufthansa's tortious interference claim. Lufthansa, on the other hand, argues that there is no preemption under the ADA, and even if there is, this Court has no jurisdiction to hear the case because the court of appeals denied the permissive interlocutory appeal. We granted the petition.
II. Jurisdiction
Our jurisdiction turns on the issue of whether an intermediate appellate court's denial of a permissive interlocutory appeal prevents this Court from reaching the merits of the underlying interlocutory order. We hold that it does not under the plain language of former Texas Government Code section 22.225(d), which states that "[a] petition for review is allowed to the Supreme Court for an appeal from an interlocutory order described by Section 51.014(a)(3), (6), or (11), or (d), Civil Practice and Remedies Code."
1
Act of May 30, 2011, 82d Leg., R.S., ch. 203, § 3.02,
A. Section 51.014(d) & (f) -Permissive Interlocutory Appeals
As a general rule, appeals may be taken only from final judgments.
E.g.
,
Lehmann v. Har-Con Corp.
,
There are, of course, exceptions to the final judgment rule that allow an immediate appeal before final judgment when the issue is so important that an answer should not wait until the case concludes. The Texas Constitution provides such an exception for certain appeals.
See
TEX. CONST. art. V, § 3-b (allowing direct appeals to this Court from a trial court in injunction cases involving matters of constitutionality). Likewise, this Court's writ power provides a mechanism for appellate review before final judgment in some circumstances.
See, e.g.
, TEX. CONST. art. V, § 3 (a); TEX. GOV'T CODE § 22.002 ;
Walker v. Packer
,
Under section 51.014(a), the Legislature authorized thirteen specific instances in which "[a] person may appeal from an interlocutory order of a district court, county court of law, statutory probate court, or county court."
By contrast, section 51.014(d) provides:
On a party's motion or on its own initiative, a trial court in a civil action may, by written order, permit an appeal from an order that is not otherwise appealable if:
(1) the order to be appealed involves a controlling question of law as to which there is a substantial ground for difference of opinion; and
(2) an immediate appeal from the order may materially advance the ultimate termination of the litigation.
An appellate court may accept an appeal permitted by Subsection (d) if the appealing party, not later than the 15th day after the date the trial court signs the order to be appealed, files in the court of appeals having appellate jurisdiction over the action an application for interlocutory appeal explaining why *731 an appeal is warranted under Subsection (d). If the court of appeals accepts the appeal, the appeal is governed by the procedures in the Texas Rules of Appellate Procedure for pursuing an accelerated appeal. The date the court of appeals enters the order accepting the appeal starts the time applicable to filing the notice of appeal.
Consistent with these statutory provisions, we promulgated procedural rules to reflect a discretionary doctrine.
See
TEX. R. CIV. P. 168 ("On a party's motion or on its own initiative, a trial court may permit an appeal from an interlocutory order that is not otherwise appealable, as provided by statute."); TEX. R. APP. P. 28.3(a) ("When a trial court has permitted an appeal from an interlocutory order that would not otherwise be appealable, a party seeking to appeal must petition the court of appeals for permission to appeal."). In the comments to Rule 28.3, we explained that the 2011 amendments to section 51.014"eliminated the prior requirement that the parties agree to the appeal and reinstated a requirement that the court of appeals also permit the appeal." TEX. R. APP. P. 28.3 cmt. We further noted that "[t]he petition procedure in Rule 28.3 is intended to be similar to the Rule 53 procedure governing petitions for review in the [Texas] Supreme Court," meaning the courts of appeals can similarly accept or deny a permissive interlocutory appeal as we can a petition for review.
Both Sabre and Lufthansa recognize the court of appeals' discretion to accept or deny a permissive interlocutory appeal under section 51.014(f). However, they do not agree about the extent and effect of that discretion. Sabre, in alternatively seeking a writ of mandamus, argues that we should hold that the court of appeals abused its discretion in denying the permissive appeal because the elements of section 51.014(d) were satisfied, while Lufthansa claims that it would be exceptionally inappropriate for this Court to overturn a discretionary denial of a permissive appeal.
As Lufthansa correctly observes, the Legislature modeled section 51.014(d) after the federal counterpart to permissive interlocutory appeals.
Compare
We agree that Texas courts of appeals have discretion to accept or deny permissive interlocutory appeals certified under section 51.014(d), just as federal circuit courts do. Our procedural rules make that clear.
See
TEX. R. CIV. P. 168 ; TEX. R. APP. P. 28.3. Here, the trial court certified an interlocutory appeal under section 51.014(d), but the court of appeals exercised its discretion-as it is entitled to do-to decline acceptance of the appeal, citing authority for strictly construing the interlocutory appeals statute.
We do caution, however, that while courts of appeals have discretion to deny acceptance of permissive interlocutory appeals, the Legislature in its enactment of section 51.014(d) and (f) has recognized the benefit of appellate courts accepting such appeals when the threshold for an exception to the final judgment rule is met. See TEX. CIV. PRAC. & REM. CODE § 51.014(d), (f) (requiring a controlling question of law on which there is a substantial ground for difference of opinion, where an immediate appeal may materially advance the ultimate termination of the litigation). When courts of appeals accept such permissive appeals, parties and the courts can be spared the inevitable inefficiencies of the final judgment rule in favor of early, efficient resolution of controlling, uncertain issues of law that are important to the outcome of the litigation. Indeed, the Legislature enacted section 51.014 to provide "for the efficient resolution of certain civil matters in certain Texas courts" and to "make the civil justice system more accessible, more efficient, and less costly to all Texans while reducing the overall costs of the civil justice system to all taxpayers." Senate Comm. on State Affairs, Engrossed Bill Analysis, Tex. H.B. 274, 82d Leg., R.S. (2011). If all courts of appeals were to exercise their discretion to deny permissive interlocutory appeals certified under section 51.014(d), the legislative intent favoring early, efficient resolution of determinative legal issues in such cases would be thwarted. Just because courts of appeals can decline to accept permissive interlocutory appeals does not mean they *733 should; in fact, in many instances, courts of appeals should do exactly what the Legislature has authorized them to do-accept permissive interlocutory appeals and address the merits of the legal issues certified.
B. Section 22.225(d) -Interlocutory Appeal to the Supreme Court
While we recognize the discretion courts of appeals have to accept or deny permissive interlocutory appeals, we disagree with the suggestion that how a court exercises its discretion determines whether this Court has jurisdiction to consider the merits of an interlocutory order that meets the Legislature's threshold for an exception to the final judgment rule-a controlling question of law on which there is a substantial ground for difference of opinion, where an immediate appeal may materially advance the ultimate termination of the litigation.
See
TEX. CIV. PRAC. & REM. CODE § 51.014(d). Section 22.225 sets out when an interlocutory appeal can be brought in this Court: "A petition for review is allowed to the Supreme Court for an appeal from an interlocutory order described by Section 51.014... (d), Civil Practice and Remedies Code." Act of May 30, 2011, 82d Leg., R.S., ch. 203, § 3.02,
Lufthansa's reliance on section 51.014(f) to conclude that this Court does not have jurisdiction is misplaced. Section 51.014(f) provides: "An appellate court may accept an appeal permitted by [ section 51.014(d) ] .... If the court of appeals accepts the appeal, the appeal is governed by the procedures in the Texas Rules of Appellate Procedure for pursuing an accelerated appeal."
No statute or rule says, nor have we ever held, that this Court lacks jurisdiction when a court of appeals declines to accept a permissive interlocutory appeal.
*734
The word "appeal," as used in section 51.014(d), is conditioned only on the trial court permitting an appeal, and not on the court of appeals' acceptance of a party's request for permissive interlocutory review.
See
TEX. CIV. PRAC. & REM. CODE § 51.014(d) ;
see also
TEX. R. CIV. P. 168 cmt. (referring to "the trial court's permission to appeal"). In other words, when the trial court issues an order certifying the case for interlocutory review, it becomes an "appeal." Moreover, nowhere does the text of section 51.014 support some sort of distinction in terminology between a pre-acceptance request for interlocutory review and a post-acceptance appeal. To the contrary, whether a party seeks interlocutory review "as of right" or seeks permissive interlocutory review, the statute refers to an "appeal from an interlocutory order," "[a]n interlocutory appeal," or simply "an appeal."
See
TEX. CIV. PRAC. & REM. CODE § 51.014(a), (b), (d). Section 51.014(e) likewise refers to permissive interlocutory review as an "appeal" and provides that trial court proceedings are not stayed unless the parties agree or "the trial or appellate court orders a stay of the proceedings pending appeal"-a clear indication that the Legislature will condition status on appellate court authorization or permission when that is what it intends.
An appellate court may accept an appeal permitted by Subsection (d) if the appealing party ... [timely files an application for interlocutory appeal in the proper court]. If the court of appeals accepts the appeal, the appeal is governed by [certain] procedures in the Texas Rules of Appellate Procedure for pursuing an accelerated appeal. The date the court of appeals enters the order accepting the appeal starts the time applicable to filing the notice of appeal.
TEX. CIV. PRAC. & REM. CODE § 51.014(f). How could a court accept something that does not yet exist?
See
Tex. Workforce Comm'n v. Wichita Cty.
,
Further, and in opposition to Lufthansa's position, is the absence of any reference to section 51.014(f) in section 22.225(d). Section 22.225(d) in its entirety provides: "A petition for review is allowed to the Supreme Court for an appeal from an interlocutory order described by Section 51.014(a)(3), (6), or (11), or (d), Civil Practice and Remedies Code." Act of May 30, 2011, 82d Leg., R.S., ch. 203, § 3.02,
*735
We addressed a similar question regarding our jurisdiction under section 22.225(d) a few years ago. In
Phillips Petroleum Co. v. Yarbrough
,
The Texas Civil Practice and Remedies Code permits an appeal from a trial court's interlocutory order that "certifies or refuses to certify a class in a suit brought under Rule 42 of the Texas Rules of Civil Procedure." TEX. CIV. PRAC. & REM. CODE § 51.014(a)(3). In turn, we have jurisdiction to consider a petition for review appealing such an order. TEX. GOV'T CODE § 22.225(d).
Lufthansa next argues that interpreting section 22.225(d) as we do will create an appeal as of right when the elements of section 51.014(d) are met. However, section 51.014(d) is clear: an interlocutory appeal will lie only if the trial court concludes that the statutory elements are satisfied and certifies the appeal. See TEX. CIV. PRAC. & REM. CODE § 51.014(d) ("On a party's motion or on its own initiative, a trial court in a civil action may, by written order, permit an appeal from an order that is not otherwise appealable ...."). The parties have no right to appeal under section 51.014(d).
Nor does our interpretation of section 22.225(d) create a direct appeal to this Court. Nothing we have said alters the *736 requirement that a party advancing a permissive appeal must first petition the court of appeals for review before petitioning this Court. See TEX. R. APP. P. 28.3(a) ("When a trial court has permitted an appeal from an interlocutory order that would not otherwise be appealable, a party seeking to appeal must petition the court of appeals for permission to appeal."). Sabre correctly requested that the court of appeals address the merits of the certified appeal, and the court of appeals declined. Sabre then correctly requested that this Court address the merits, and section 22.225(d) allows us to accept.
Finally, Lufthansa complains that interlocutory review is disfavored as a general matter because of the importance of the final judgment rule. As we have discussed, the final judgment rule ensures issues are decided on a full record, prevents unnecessary delays in the underlying trial, and allows appellate courts to consider all issues in a single round of review. A departure from the final judgment rule in the form of an interlocutory appeal must be strictly construed because it is "a narrow exception to the general rule that interlocutory orders are not immediately appealable."
CMH Homes v. Perez
,
To conclude, an appellate court, including this Court, "lacks jurisdiction to review an interlocutory order unless a statute specifically authorizes an exception to the general rule, which is that appeals may only be taken from final judgments."
Quest Commc'ns Corp. v. AT & T Corp.
,
III. Preemption Under the ADA
The only issue before us is whether the ADA preempts Lufthansa's tortious interference claim against Sabre. The trial court denied Sabre's Rule 91a motion to dismiss, concluding that the ADA does not preempt Lufthansa's tortious interference claim. We agree. While the record is sparse, there is enough for us to conclude that Lufthansa's tortious interference claim does not relate to the airline's prices, routes, or services, and even if the claim *737 did so relate, it does not amount to any state law, regulation, or policy that Congress was concerned with when enacting the ADA's preemption clause.
A. Two-Part Test
In 1978, Congress enacted the ADA, which deregulated the airline industry in order to encourage market competition, lower prices, advance innovation and efficiency, and increase the variety and quality of air transportation services.
See
Morales v. Trans World Airlines, Inc.
,
Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier ....
Following United States Supreme Court holdings, we have applied a two-part test to determine whether common law claims are preempted.
See
Delta Air Lines, Inc. v. Black
,
1. Related to an Airline's Prices, Routes, or Services
Sabre points to the text of the ADA, which preempts any state "law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier."
During oral argument, Lufthansa clarified its position on Sabre's alleged tortious interference. Lufthansa's counsel explained *738 that the dispute involves only booking fees Sabre improperly collected through "passive bookings," not the surcharge. Lufthansa provided this example: A customer requests a $ 500 ticket from a travel agent, the customer pays $ 500, and the travel agent books a $ 500 ticket for the customer via Lufthansa's direct connections . The airline then issues a $ 500 ticket to the customer via the travel agent. No surcharge is imposed, and no GDS is involved. According to Lufthansa, the alleged tortious interference occurred because of conduct after tickets are sold. That is, Sabre allegedly induces the travel agent to breach its contract with Lufthansa by making a "passive booking" in Sabre's GDS for the ticket booked through a direct connection. Because the ticket sale is entered in Sabre's GDS, Sabre charges a passive booking fee to Lufthansa for a ticket that was sold and issued outside and apart from the GDS system. Lufthansa then pays Sabre's fee under protest, adding to the airline's costs but not affecting its customer's $ 500 ticket price.
We agree with Lufthansa that price and cost are distinct concepts. Increasing an airline's cost does not automatically lead to a corresponding increase in airline ticket prices. The existing record does not demonstrate that, as a matter of law, the circumstances giving rise to the tortious interference claim had any effect on airline prices. And while the United States Supreme Court did hold that the deliberately expansive phrase "relating to [prices], routes, or services" preempts any "State enforcement actions having a connection with or reference to airline '[prices], routes, or services,' "
Morales
,
Lastly, while Sabre does not argue that the claim relates to routes, we address Sabre's contention that the tortious interference claim relates to Lufthansa's services. The essence of Lufthansa's claim, Sabre argues, is that Sabre obstructed Lufthansa's attempt to distribute its services through direct connections. Whatever truth this may have, we conclude it is likewise "too tenuous, remote, or peripheral" to have a preemptive effect. To hold otherwise would essentially eliminate any limitation on the ADA's preemptive reach because all claims brought by or against an airline will relate to the airline's services in some distant sense.
2. State Enactment or Enforcement
Under the second prong of the test, the ADA preempts the claim if the action amounts to enforcement of a state law, rule, regulation, standard, or other provision having the force and effect of law.
Kiefer
,
We begin our analysis with
American Airlines, Inc. v. Wolens
,
This Court built on
Wolens
in
Continental Airlines, Inc. v. Kiefer
, our first opportunity to analyze the scope of the ADA's preemption as it relates to personal injury actions.
As Wolens recognizes, suits on private contracts involve some enforcement of state law-the law of contracts. Wolens ' emphasis on the voluntariness of contractual undertakings is important, not because states have no role in enforcing contracts-they do-but because contract law does not effectuate purposes that could have a prohibited regulatory effect on airlines. If contract law were less uniform among the states, varying according to differing States' interests, it might, as the DOT argued in Wolens , "effectuate the State's public policies, rather than the intent of the parties" and thus be preempted. It cannot be said that enforcement of contracts involves none of "what the State dictates," but only that contract enforcement involves so little state policy that it cannot be considered regulation of airlines preempted by the ADA.
The duty to exercise ordinary care is different. Unlike a contractual obligation, it is imposed by law, not voluntarily assumed. Enforcement of the duty through a common-law negligence action does not merely give effect to "privately ordered obligations," as a breach of contract suit does. On the other hand, like contract actions, a negligence action does not carry the same "potential for intrusive regulation of airline business *740 practices inherent in state consumer protection legislation." Simple negligence law is not as uniform as contract law, but it is far more policy-neutral than specific-purpose legislation, like consumer protection laws. If states "impose their own public policies ... on the operations of an air carrier" by allowing enforcement of consumer protection laws but not by allowing suits for breach of the carrier's contracts, allowing negligence actions falls somewhere in between.
In light of
Wolens
and
Kiefer
, Lufthansa presents its tortious interference claim as a way to enforce its contracts with various travel agents. That is, according to Lufthansa, a suit by an airline to protect its contracts is like a suit against an airline for breach, which is not preempted.
See
Wolens,
Northwest, Inc. v. Ginsberg
, while instructive in other aspects, is not controlling here.
Northwest
stands for the proposition that "[t]he ADA pre-empts a state-law claim for breach of the implied covenant of good faith and fair dealing if it seeks to enlarge the contractual obligations that the parties voluntarily adopt."
Id. at 273,
Furthermore, we observe that the case law referred to in the trial court's interlocutory order,
Frequent Flyer Depot, Inc. v. American Airlines, Inc.
, is in line with what we have said here.
See
IV. Conclusion
Under former Texas Government Code section 22.225(d), a trial court's order that is certified under section 51.014(d) of the Texas Civil Practice and Remedies Code is the only jurisdictional predicate for a petition for review in this Court. The court of appeals' decision to decline the permissive appeal has no bearing on our jurisdiction under section 22.225(d). Regarding the merits of the underlying interlocutory order, we hold that the ADA does not preempt Lufthansa's tortious interference claim because the action does not relate to the airline's prices, routes, or services. Nor does the claim amount to any state law, regulation, or policy that concerns ADA preemption. Accordingly, we affirm the trial court's denial of Sabre's motion to dismiss pursuant to Texas Rule of Civil Procedure 91a.
Justice Green delivered the opinion of the Court.
Because the trial court entered its order on May 1, 2017, former Texas Government Code section 22.225(d) applies.
See
Act of May 29, 2017, 85th Leg., R.S., ch. 150, § 5,
Section 1292(b) of the United States Code provides:
When a district judge, in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals which would have jurisdiction of an appeal of such action may thereupon, in its discretion, permit an appeal to be taken from such order, if application is made to it within ten days after the entry of the order: Provided, however, that application for an appeal hereunder shall not stay proceedings in the district court unless the district judge or the Court of Appeals or a judge thereof shall so order.
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